Labor Migration from Nepal: How Destination Decisions Occur and Impact the Remittances

• In Event: Policy and Precarity: The Effects of Immigration Enforcement and Legal Status on Migrant Outcomes

Abstract

Nepal has witnessed enormous growth in labor migration and foreign remittances in the past two decades, generating over one-quarter of the gross domestic product currently. The decision to pursue foreign employment, however, is deeply personal that is made at the individual or family level, by paying close attention to both macro and micro level environments. Using data from the Nepal Living Standard Surveys of 2010-2011 and 2022-2023, this paper examines the decision-making processes of labor migration both internally and externally and how they affect the remittance outcomes. Given that many migration destinations exist in South Asia, Middle East and other parts of Asia, and the developed world, the analysis seeks to explain the roles of human capital, financial endowments, and other factors that operate at the individual and family levels using instrumental variables, propensity score matching, and multinomial logistic regressions. Whereas most of the studies of labor migration and remittances suffer from the potential self-selection bias and associated opportunity costs, a subsample focusing on the absentee population throughout Nepal helps mimic the application of quasi-experimental design to distinguish the characteristics and migration outcomes by the destination countries. The findings help sort out the way migration decisions are made as a necessary first step across both urban and rural areas of Nepal, with the intended goal of maximizing remittances. In the context where government policies on employment generation implicitly encourage today’s youth population to seek foreign employment, the insights from this analysis will also help assess how the key motivations and decision processes may have changed during the 12 years covered in the data.

Author

• Udaya Wagle, Northern Arizona University
  Presenting Author